Mortgage cycling is a repayment strategy that promises to cut years of repayment off your mortgage and save you thousands of dollars. Payoff your mortgage in 10 years without refinancing your current mortgage. How does it work and is it worth the risk?
Amortization is the process by which part of your payment goes towards the principal loan balance and part goes to interest. Mortgage loans are front loaded with interest; this means in the early years nearly all of your monthly payment is made to interest. The interest portion of your monthly payment is calculated monthly based on the outstanding balance of the loan. By making large equity payments you are reducing the amount of interest you pay faster. Read the rest…
